The founder and controlling shareholder of the company that makes equipment for China’s Beidou navigation system has been arrested on charges of misappropriation of funds

01.16.2014 17:04

Founder of Company that Makes Beidou Equipment Arrested for Taking Funds

Scandals in Chengdu expand to include He Yan, head of firm that is linked to China’s prized satellite navigation project

By staff reporter Liu Zhuozhe

(Beijing) – The founder and controlling shareholder of the company that makes equipment for China’s Beidou navigation system has been arrested on charges of misappropriation of funds. Gotecom Electronic Technology Co. Ltd. made the announcement regarding He Yan, 53, on January 15. The firm, which is based in Chengdu, in the southwestern province of Sichuan, said the episode is not affecting its business.Gotecom Electronic is the largest producer of equipment that uses the Beidou navigation system, such as handsets or units for cars.

Beidou, which means Big Dipper, is intended to rival America’s Global Positioning System and Russia’s Glonass. Sixteen satellites are already orbiting Earth, and there are plans to launch more over the next decade.

The arrest of He is part of a broader set of investigations into political and business leaders in Chengdu. The city’s former Communist Party secretary, Li Chuncheng, was detained by party graft fighters in December 2012. Over the next year, four business figures, including He, were detained.

Shenzhen-listed Gotecom said in July last year that He had been detained over illegal business operations.

The Ministry of Public Security used police in Yichang, in the central province of Hubei, to handle her case. He owns 51 percent of Chengdu GoldTel Group, which itself owns 38.33 percent of the listed Gotecom Electronic. He is also chairman of the group.

Also in July last year, Gotecom said that chairman of the company’s board of supervisors, Wang Guoxing, had not been in contact with his family or colleagues, an indication he was part of the party’s investigation. Two months later, Gotecom said Wang had finished his involvement in the inquiry and returned to work.

GoldTel was founded by He in 1995, and she oversaw it grow to employee 2,000 people and do businesses at home and abroad. She also goes by He Ran, and uses the English name Jessica He overseas. She is on the advisory board of China Business Solutions Ltd. The British company says on its website it advises clients doing business in China.

The three other Chengdu business figures to come under investigated are Li Guangyuan, chairman of Star Cable Co. Ltd.; Tan Jianming, chairman of Xingrong Investment Co. Ltd.; and Liu Han, chairman of Sichuan Hanlong Group.

The three have not been formally arrested. Star Cable Co., which makes cables and wires, says its largest customer is state-owned China National Petroleum Corp. (CNPC), itself the subject of a corruption investigation.